Croft thinks oil could exceed $146 per barrel if a full-out regional war develops: File Image/Pixabay.

With the U.S./Iran hostilities now firmly expanded to include Yemen’s Houthi militia attempting to strangle Saudia Arabia oil exports from the Red Sea, oil prices on Thursday surged more than 6 percent to breach $100 per barrel for the first time in two months – and fears were kindled that $120 per barrel could soon be reached.

The Iran-backed Houthis claimed responsibility for attacks on two Saudi Arabian oil tankers, the ‌Encelia and Layla, using ballistic and cruise missiles as well as drones, which caused one of the vessels to be set ablaze.

U.S. president Donald Trump on Thursday promised to to inflict “major military punishment” on Tehran and the Yemen militants if any further attacks were launched in the Red Sea; he also told  media that he was “considering a massive attack” against Iran, “bigger than ever before…I am close to making a decision: we are all set for it.”

Susannah Streeter, chief investment strategist at Wealth Club, said, “With both the Strait of Hormuz and the Red Sea now under increasing pressure, markets are bracing for the possibility that the conflict could disrupt key energy routes [and] keep oil prices elevated.”

Goldman Sachs analysts agreed, saying oil prices would likely retain most of their recent gains through July and August as global inventories continue to decline, supported by lower Middle East production, summer travel demand and a slowdown in strategic petroleum reserve releases.

For her part, Helima Croft, global head of commodity strategy at RBC Capital Markets, said Brent could even surpass the 2008 peak of $146 per barrel in the event the spreading hostilities might evolve into a full-scale regional war in the Middle East.

Croft also said the global oil market was being pressured by the Ukraine/Russia war in which the former has attacked more than 150 tankers in the Black Sea and Sea of Azov this month; the strikes have forced the Caspian Pipeline Corporation to stop loading crude at its Black Sea terminal.

In other oil news on Thursday, data released from the Energy Information Administration showed  that the average refinery capacity utilization across the U.S. was 96.2 percent as of July 17, up from 94.7 percent in the same week in 2025.

The EIA also disclosed that the Midwest and Rocky Mountains regions, PADD2 and PADD4, respectively, were at 100 percent utilization as of last week.